Tanzania: Falling Fuel Price Creates Shortages in Fuel Supply Chain

There have been scenes of desperation and chaos at many petrol stations in the city for the past few days as motorists are turned away apparently because fuel stocks have run out.  Even after EWURA’s intervention to set prices for the fuel products, companies involved in distribution have continued to make good profits. Engen and GAPCO depots were selling fuel to local petrol retailers, while depots belonging to others like Total had already finished their stocks and were awaiting scheduled arrival of a ship bringing in a new consignment.

The Deputy Minister for Energy and Minerals, Adam Malima, told local media in an interview that there were enough fuel reserves in local depots to cater for any shortages for the time being. Earlier this month, the government through EWURA issued indicative prices for petrol, diesel and kerosene in an effort to force down local retail prices which, despite a price plummet in international markets, were being kept high in Tanzania for reasons best known to the sellers.

Reports said the indicative pricing should be at least 27 per cent lower than prevailing retail prices, and any local petroleum dealers selling their products above the indicative pricing would be liable to punitive measures set up by EWURA.  According to EWURA Director General Haruna Masebu, the indicative pricing will be published weekly in accordance with international market prices.

He said petroleum dealers in the country are allowed to compete with one another, so long as they do not exceed the indicative pricing computed by the regulatory authority by more than 7.5 per cent.  Tanzania relies solely on imported petrochemical products, which affect the country’s inflation rate to a large extent.

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